Briefing.com reported hiring at 203,000 vs. a consensus of 188,000. Further, they presented a glowing view: “There is no way around it, the labor situation has improved significantly over the past few months. This was shocking considering most economists, including us, initially believed the government shutdown was going to derail the employment sector with increased private layoffs and furloughs. Instead, the private sector showed an unexpected resiliency as firms expanded rather than retrenched during the shutdown.” Report from Briefing.com at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/employ.htm
This was a strong beat, but less than the 210,000 jobs that Art Cashin,
UBS, thought would cause trouble for the markets (yesterday’s blog).
JOBS GROWTH SOLID ENOUGH FOR FED TO TAPER, BUT NOT NOW
(CNBC)
The 203,000 jobs added in November confirmed that the
employment picture is improving, but not enough to push the Fed to remove
stimulus before next year…The unemployment rate also fell to 7 percent from 7.3
percent…"It's as good a jobs report as one could expect - strong gains in
employment, sharp decline in unemployment, increase in hours worked. It was
unambiguously strong," said Mark Zandi, chief economist at Moody's Analytics.”http://www.cnbc.com/id/101251061
CASS FREIGHT INDEX SHOWS YEAR OVER YEAR GROWTH (Cass Info)
The November shipment index is
1.1 percent higher than a year ago and 4.6 percent higher than November 2011.” http://www.cassinfo.com/Transportation-Expense-Management/Supply-Chain-Analysis/Cass-Freight-Index.aspx
No trouble in the economy when measured by freight hauled, except growth
is slow – nothing new there.
ANOTHER ONE BITES THE DUST
Why I’ve Become Bullish (CNBC)“Byron Wien is changing his tune. In January, he predicted that 2013 would be a tough year for stocks—but now he says that the market has further to run.”
http://www.cnbc.com/id/101250659
I just thought this was interesting that another bear has switched to bull.
MARKET REPORT
Friday, the S&P was up 1% to 1805 (rounded).
VIX fell 9% to
13.79. That’s a big move down; the
options boys liked today’s news. Friday, the S&P was up 1% to 1805 (rounded).
Today, the Employment Report was Goldilocks news; not too
hot and not too cold. It was good news,
but not too good and TAPER (reductions in FED bond buying) seems off the table
for the December FED meeting.
Still, the “Market” looks out 3 to 6-months. With a reduction of QE expected to start
3-months from now, at the March FED meeting, one would think this might be some
concern for the market now or in the near future.
Friday was “statistically significant” since it exceeded NTSM
statistical parameters that usually bring a down-day the next trading day. That statistical signal usually occurs when
the market moves about 1%, but not always since my analysis considers volume
and price. This indicator means that my
call for a pullback is more likely now, rather than less likely.
MARKET INTERNALS (NYSE DATA)
Friday’s volume on the NYSE was 6% below the norm over
the past month, so today’s rally wasn’t all that impressive. For a 1% up day, that seems anemic to
me. Looking at statistically-significant
days over the past 3-months, all 5-days were above the norm, not below. That suggests there isn't strong conviction in today’s
move and the market may revert to declines next week.
The 10-day moving average of stocks advancing remained 49%
at the close Friday. (A number below 50%
for the 10-day average is generally bad news for the market.)
New-highs outpaced new-lows Friday, leaving the spread
(new-hi minus new-low) at plus 44 (it was -75 Thursday). The 10-day moving average of change in the
spread remained negative at minus-4. In
other words, over the last 10-days, on average, the spread has decreased by 4
each day.
This trend following indicator is neutral on the market
in the short term, because the advancing volume was barely positive. Otherwise it would have been negative.
Market Internals are a decent trend-following analysis of
current market action, but in 2013 (so far), if I had been buying the positive
ratings and selling negative ratings I would have under-performed a
buy-and-hold strategy.
NTSM ANALYSIS
Overall, NTSM is neutral.
(I am mostly out of the market already.)
MY INVESTED POSITION (NO CHANGE)
I remain about 20% invested in stocks as of 5 March
(S&P 500 -1540). The NTSM system
sold at 1575 on 16 April. (This is just
another reminder that I should follow the NTSM analysis and not act emotionally
– I am now under-performing my own system by about 6%!) I have no problems leaving 20% or 30%
invested. If the market is cut in half
(worst case) I’d only lose 10%-15% of my investments. It also hedges the bet if I am wrong since I
will have some invested if the market goes up.
No system is perfect.
I still lean toward getting back in, after a pullback, to
speculate on a final ride to the top.
NTSM did give several buy signals over the weeks of 14 and 21 Oct, but
the market just looks too frothy to rush back in…we’ll see if the market will
pullback so I can join the insanity. If
not, cash is fine.
